[Background: At the time of the litigation there was a law that required landlords to continue rental agreements indefinitely. There had also been, for decades, a practice called "key money," whereby one would pay part of the value of an apartment in a lump sum and would receive long-term rights to rent it at a greatly reduced price.]

Case: The plaintiff (=pl) has been renting an apartment from the defendants’ (=def) father and after his death from them for a long time, on a monthly basis. Now, pl claims rights under the Law for the Protection a Tenant and wants to sublet the property and receive part of the key money.

Ruling: In general, beit din accepts the Law for the Protection of a Tenant. This falls within the rights of the community to set prices in order to manage commerce for the public’s benefit (Shulchan Aruch, Choshen Mishpat 231:27), as it can also set a price required to free up an apartment from its status of being rented. At a time when there is an insufficient supply of rental apartments, it is crucial to provide protection for renters. The practice of key money is included in this authority. Although poskim refer to the need to receive approval from a "great person in charge of the community" (Rama and Shach, ad loc.), that is needed only so that penalties can be levied against violators, and not to regulate prices. In any case, Rashi (Bava Batra 9a) says that if the matter is done in the presence of the city’s rabbi, his silence is sufficient. In this case, the Chief Rabbinate raised no objections to the legislation.
The original contract between def’s father and pl allowed renewal of the rental upon notice, and that notice is to be assumed if pl continued living there. The contract also stated that if the landlord’s son got married and wanted the apartment, pl would have to vacate it. Under such circumstances, the Law for the Protection of a Tenant would not apply. Pl claims that since that agreement lapsed and he continued living there without a contact, the law applies. However, the halacha is that when there is a detailed agreement for a time period and the general agreement is extended without stipulation, the previous conditions continue (Shulchan Aruch, CM 312:9). Therefore, the existing agreement obviates the Law of Protection of a Tenant.
Furthermore, when the landlord’s son married, he demanded the apartment, and pl refused to vacate it, against the agreement. Pl justifies this with the claim that he was supposed to receive a room to live in, which was not provided. However, the contract states that there was another option – return of the relevant rental fee – and this the landlord did offer and pl improperly rejected. The landlord eventually tired of trying to evict pl and allowed him to stay thereafter, and we say that when one party improperly pressures the other into a sale, the sale is valid (ibid. 205:1). However, that improper continuation of living in the apartment should not be viewed as undoing the original agreement and therefore does not afford pl the rights guaranteed by the law, as the law states that it is for legal occupation. Therefore, pl does not have the right to sublet the apartment and receive part of the key money.